2. 1 | Nathan Klotzman
1. Executive Summery…………………………………………………………………………………….3
2. Marketing Plan Assumptions and Limitations……………………………………………..4
3. Situation Analysis……………………………………………………………………………………….4
a. Company Analysis…………………………………………………………………………….4
i. Market Shares………………………………………………………………………..6
b. Target Market Analysis……………………………………………………………………..7
i. Customer Value Analysis.……………………………………………………….7
c. Competitor Analysis……………………………………………………………………….11
d. SWOT Analysis for Cutco…………………………………………………………………13
i. Strengths………………………………………………………………………………13
ii. Weaknesses………………………………………………………………………….14
iii. Opportunities……………………………………………………………………….14
iv. Threats…………………………………………………………………………………15
e. PEST Analysis for Cutco…………………………………………………………………..16
i. Political Factors…………………………………………………………………….16
ii. Economic Factors………………………………………………………………….16
iii. Social Factors………………………………………………………………………..17
iv. Technological Factors……………………………………………………………17
4. Consumer Market Segmentation………………………………………………………………19
a. Vector Marketing Corporation………………………………………………………..19
b. Cutco Retail Stores………………………………………………………………………….20
5. Alternative Marketing Strategies………………………………………………………………21
a. Recruiting Additional Sales Representatives……………………………………21
i. Strengths………………………………………………………………………………21
ii. Weaknesses………………………………………………………………………….21
iii. Opportunities……………………………………………………………………….21
iv. Threats…………………………………………………………………………………21
b. Expanding Internet Channels for Follow-up Orders………………………..22
i. Strengths………………………………………………………………………………22
ii. Weaknesses………………………………………………………………………….22
iii. Opportunities……………………………………………………………………….22
iv. Threats…………………………………………………………………………………22
c. Opening Retail Stores……………………………………………………………………..23
i. Strengths………………………………………………………………………………23
ii. Weaknesses………………………………………………………………………….23
3. 2 | Nathan Klotzman
iii. Opportunities……………………………………………………………………….23
iv. Threats…………………………………………………………………………………23
d. Pursuing International Expansion……………………………………………………25
i. Strengths………………………………………………………………………………25
ii. Weaknesses………………………………………………………………………….25
iii. Opportunities……………………………………………………………………….25
iv. Threats………………………………………………………………………………...25
e. Growth Driver Table………………………………………………………………….26-27
6. Selected Marketing Strategies………………………………………………………………….28
a. Marketing Mix Decisions (4 P’s)………………………………………………………30
i. Product…………………………………………………………………………………30
ii. Price……………………………………………………………………………………..30
iii. Place (Distribution)……………………………………………………………….30
iv. Promotion…………………………………………………………………………….31
7. Short & Long-Term Projections………………………………………………………………...32
8. Conclusion………………………………………………………………………………………………..35
9. Bibliography……………………………………………………………………………………………..37
4. 3 | Nathan Klotzman
Executive Summery………………………………………………………………………………………………
Cutco Corporation has made sales in North America and on all other
continents, excluding Antarctica. Most of the desired target market who have
bought in North America were educated and aged 35-59, having an annual
household income above $50,000. For the past thirty years, Cutco has relied
heavily on Vector Marketing to make most of their sales by way of direct selling,
unlike other companies who mainly use retail stores. Therefore, over the past
twenty years, Cutco’s name brand recognition has had a growth to the point
where very little investment is needed to maintain it.
At this stage, to accomplish Cutco’s goal of attaining $2.5 billion as revenue
annually in the next five years and eventually earn revenue of $5 billion annually,
Cutco has to attain new customers and retrieve previous customers.
After researching four different alternatives of drawing in more customers,
I have come to the conclusion that recruiting additional college sales
representatives, with opening retail stores is the best marketing plan for Cutco.
The main strategy will be to attain new customers through the sales
representatives, with the retail stores picking up the customers that fell out of the
loop.
You will see through my analysis that in the next five years Cutco will reach
its goal of potentially generating revenue of $2.5 billion or more. Furthermore,
this plan is consistent with previous strategies used by Cutco and will be the least
impacted by the kitchen knife manufacturing industry decline stage.
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Marketing Plan Assumptions and Limitations………………………………………………………
This marketing plan is dependent on these expectations:
A multitude of good sales representatives will be hired.
The market potential will not run out.
Consumers will prefer Cutco cutlery over other brand cutlery.
Previous customers will come to the stores to buy more cutlery.
The decline in the industry will have little or no effect on Cutco.
Situation Analysis…………………………………………………………………………………………………
Company Analysis
Cutco Corporation, currently located in Olean, N.Y., is the owner of many
subsidiaries, they are: Cutco Cutlery Corporation, Cutco International Inc., KA-
BAR, Schilling Forge, and Vector Marketing Corporation. Through these
subsidiaries, Cutco manufactures a large range of kitchen cutlery and accessories.
Included in the Cutco production lines are: kitchen gadgets, utensils, and flatware;
military, sporting, and all-purpose utility knives; cookware and garden tools. A
small part of Cutco though, manufactures and markets precision forging that is
not ready for customer consumption.
After the manufacturing of its products, Cutco uses its subsidiary Vector
Marketing to sell its products. Within itself, Vector Marketing employs around
6. 5 | Nathan Klotzman
60,000 college students each year as independent contractors, to take the sales
to homeowners, as the salespersons.
The Flipside
As the authorized college student goes from door-to-door selling Cutco’s
products, they practice the direct sales approach. This is opposed to retailing
sales, which is in-store selling.
In 2006, Cutco’s first retail was opened in PA to do business. Since then,
seven more stores were opened in GA, IN, MN, MO, TX, and two in MI with more
to come. There are two reasons Cutco is opening stores, one is to bring back the
customers they lost when the college student graduated and the other reason is
to have the ability to service customers’ products. About 95% of people who visit
the store are already Cutco customers to either get their knives sharpened or
replaced as part of the company’s “forever” guarantee or stop by to find out
about new products.
The retailing has to move slowly so it doesn’t cannibalize sales of the
representatives’.
7. 6 | Nathan Klotzman
31%
3%
11%
55%
Kitchen Knife Manufacturing
Indusrty Revenue
Cutco
Dexter-Russell
Other American
Companies
Imported
Market Shares
Cutco’s market share in the kitchen knife manufacturing industry as of 2012
is 31%. According to the US
Industry Market Research
Report found on IBISWorld,
the kitchen knife
manufacturing growth stage
was to continue through 2013, before declining sharply through 2017. Rising
input costs and the fact that more than 50% of the industry’s revenue is imported
are just two of the reasons that the industry is declining. As of 2012, after Cutco,
Dexter-Russell, the next largest player in the kitchen knife manufacturing, only
accounted for 3%. The differentiation between Cutco and Dexter-Russell shows
the importance of brand name recognition.
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Target Market Analysis
Only in 2011, when Cutco started using eSite, did Cutco start to be able to
identify who they were marketing to. Most, 60%, of Cutco customers are between
35 and 59 years old. Over the past four years, 2008-2012, it has been noted that
the median household income in the United States was $53,046, meaning half of
the amount of households were in the desired target market. On April 25, 2012
Tim McCreadie, a Cutco executive spearheading the store expansion stated that
Cutco has over 15 million customers in the United States.
Customer Value Analysis
People usually buy Cutco products for four reasons, its exceptional quality,
it’s really sharp, it’s made in America, and it’s backed by The Forever Guarantee.
Exceptional product quality relative to Cutco’s kitchen cutlery is defined by
the perfected strength, ergonomics, and utility of every Cutco product. Strength
in this definition, means resistance to deformation, which is very helpful in the
kitchen when one is dealing with food especially vegetables with grit on them.
Another exceptional quality is Cutco’s ergonomic handle which is a universal fit
for large or small, right or left hands. Its fatigue-resistant design locks in one’s
hand, between thumb and forefinger, for safety and control. Furthermore, the
9. 8 | Nathan Klotzman
quality of the metal rivets, made of nickel-silver alloy, has the ability to resist
staining and tarnishing.
Cutco knives go through a three step heat treating process to ensure the
innovative Double-D® and straight-edge blades are
durable, flexible, and hold a cutting edge. The blades
first go through a process called blanking where they
are punched out of 440A high-carbon stainless steel.
440 series high-carbon stainless steel, is also known for a much better edge
retainer, than other metals with low or no carbon,
when it is heated properly, also being class A means
it has the least amount of carbon in the series, so it is
the most surgically stain resistant. Since most people
have little or no experience with sharp knives, when they get knives with the
Double-D® features they will enjoy the fact that they cut, unlike other knives in
most people’s homes, and start using them for all cutting purposes.
According to a nationally representative survey by the Consumer Reports
National Research Center, given a choice between a product made in the U.S. and
Double-D® Edge
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78% 22%
46.80%
19.5%
American v. Abroad
Made in America
Made in Abroad
Pay 10% More!
Pay 20% More!
a similar one made abroad, 78% of Americans would rather buy the American
product. At least 80% of the people’s reasoning is keeping jobs in America
and keeping American manufacturing
strong in the global economy, while
more than 60% of the same people
were also worried about child
workers or cheap laborers overseas
with the belief that American-made goods are of higher quality as well.
Furthermore, more than 60% of the respondents indicated that even if the
product cost 10% more than the imported version they would buy the American-
made appliance; more than 25% said they would pay even 20% more.
All of Cutco’s products are backed by its Forever Guarantee, this covers its
products performance and sharpness. Whenever one needs a product fixed, all
they have to do is mail it to Cutco and they will take care of it. This excludes any
problems from misuse or abuse of a product where Cutco offers half off its
current retail price to buy the item new.
11. 10 | Nathan Klotzman
Having these four qualities highly encourages consumers, who enjoy high-
quality American made products that have a secure guarantee. For they do not
have to be concerned about their cutlery breaking from things like cutting cheese
or being dropped in the sink from a small height because of the low quality in
their cheap knives from abroad.
12. 11 | Nathan Klotzman
Competitor Analysis
Dexter-Russell is Cutco’s main competitor, holding 3% of the market shares
in the industry as of 2012. Like Cutco, Dexter-Russell manufactures its high-quality
products in the United States, have designed their blades to be sharp, and are
sold by authorized people and stores as parts of their competitive marketing
strategies. However, Dexter-Russell has a specialty products with straight-edged
blades whereas Cutco has a specialty products with serrated, Double-D®, blades.
Comparing cutlery between Cutco and Dexter-Russell in use is not really
possible because their target markets for the most part not the same even though
the other’s target market might cross over the line and purchase the opposite
brand. Meaning, Cutco is made mainly for the average family, while Dexter-
Russell is made mainly for institutions and chefs and some chefs prefer Cutco,
while some families prefer Dexter-Russell. One of the decision factors, that effect
the consumer buyer behavior, is the balance of the knives, Cutco’s knife balance is
usually in the blade, while Dexter-Russell’s knife balance is usually between the
blade and handle. Another reason consumers take a preference is the shape of
the blade the knives have, knives that works for one person do not necessarily
work for another.
13. 12 | Nathan Klotzman
In creating a brand name, however, Cutco takes the blade with a
competitive advantage, cutting the 31% off the market share pie. Since Cutco has
Vector Marketing, to sell its cutlery by way of college representatives, people who
have families and friends, advertising by word of mouth, consumer-generated
marketing, and instigating sales in a convenient matter, company- generated
marketing. Dexter-Russell though, sells only through particular institution and
chef stores making it less convenient for the casual buyer, who heard about it
from a friend or chef.
Other Cutco competitors in the cutlery industry are mostly in-store sellers,
with similar designs to each other, and are made outside the United States. In
emphasizing its high-quality, unique designs, customer care, and the fact that it is
made in the United States, Cutco will separate itself from these other
competitors.
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SWOT Analysis for Cutco
Strengths
10%: High-quality kitchen cutlery: CUTCO’s cutlery has unique designs
making it a higher-quality over store bought knives. A couple of the designs
are the Wedge-Lock handle, giving the cutlery a non-slip grip, and Double-D
stay-sharp recessed edge, keeping the blade sharp as well.
50%: Owner of Vector Marketing Co.: As the owner of Vector Marketing
Co., CUTCO utilizes its platform marketing model to sell its cutlery
throughout the United States and Canada. This is how CUTCO sells its
products and procures consumers.
30%: Brand name recognition: Through both direct marketing channel, by
way of Vector Marketing, and high-quality products, by way of design,
CUTCO has made a Brand name for itself. Furthermore, CUTCO also uses
promotions and advertisements to make itself a name in the kitchen cutlery
manufacturing.
10%: Made in America: 78% of Americans would rather buy American
products over abroad.
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Weaknesses
50%: Seasonal sales: Since CUTCO markets itself solely through Vector
Marketing, the only major time for sales is during the summer season. The
reason for this is that the college representatives who are hired by Vector
Marketing to sell the products are more available at that time.
50%: Current manufacturing is near capacity: When CUTCO increases its
customers, and more cutlery than available is bought, CUTCO will have to
limit its amount of sales or expand its manufacturing division.
Opportunities
20%: Increase brand awareness to customer base: There are always
opportunities for growth in this area because people always want the best
high-quality when they can afford it. CUTCO, by way of Vector Marketing,
gets college students who have networks of friends and families to sell and
tell about CUTCO cutlery to their networks.
20%: Broaden customer base: CUTCO can increase its customer base by
entering its cutlery into other markets around the globe. Targeting other
countries, for example China enjoys high-quality American products.
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60%: Online sales: In today’s marketing world, CUTCO’s corporate web site
allows anyone who wants, to research and buy CUTCO cutlery without any
hassle.
Threats
40%: Competitors use department stores: Not everyone trusts the internet
or a person who comes to your door like a salesman. Some people enjoy
going someplace and checking products on their own without interference.
20%: Competitors have lower costs: Since other companies make their
cutlery cheaper, by using cheaper material or having it made in another
country, it is more affordable than CUTCO’s cutlery.
40%: Price increases 5% every other year: Now that material and labor
costs are rising, CUTCO has to markup its price to still come out on top. This
makes it harder and harder to sell to people who want to pay less for more.
17. 16 | Nathan Klotzman
PEST Analysis for Cutco
Political Environment
Sales Tax: Since Cutco is a direct sales company and does business in all 50
states, Cutco is required to collect and remit sales tax.
Environmental Sustainability: Over the past ten years, Cutco has hired
Leader Consulting Services, to do sampling and testing for its properties
and business. This included asbestos sampling and testing, test monitoring
wells, and sampling soil and groundwater. Leader Consulting Services has
also performed feasibility studies and remedial alternative designs for some
facilities.
Economic Factors
Economic environment: Atlanta, one of Cutco’s strongest areas, is having
significant economic growth. There approximately 80,000 customers in the
greater Atlanta area.
Inflation Rate: Cutco’s prices are rising 5% every other year due to material
and Labor costs rising.
Market: It has been predicted that the market will decline for kitchen knife
manufacturing industry.
18. 17 | Nathan Klotzman
Social Marketing
Health conscious: In the past, Cutco has donated more than half a million
dollars to support the American Heart Association’s Go Red For Women®
movement.
Distribution: Every year, more students go to college and get jobs with
Vector Marketing to sell Cutco’s cutlery; each college representative knows
more people who are not yet in Cutco’s customer database.
Vector Marketing: Some people, who have worked for Vector Marketing
and were not successful, are resentful of Cutco’s cutlery corporation,
having not completely understood the separation of the companies, and
are spreading their mistrust of Cutco to other people.
Safety and Control: All of Cutco cutlery has been fitted with an ergonomic
handle that secures itself in one’s hand for better control.
Moving: Nima Samadi, an IBISWorld industry analyst, indicated in her
report most kitchen knives are purchased when people move into new
homes.
Technological Factors
Websites: Buying and Researching Cutco cutlery is easier to do through
online sources, however it will take away some sales from the authorized
college representatives.
19. 18 | Nathan Klotzman
Online Social Network: Facebook is a way customers can learn new recipes,
watch how Cutco cutlery is used, and get customer insight from other
people enjoy Cutco’s cutlery. Cutco currently has a fan base of 39,505
people, 93.7%, 36,999 of which are in the United States.
Internet: Approximately 15 million United States residents have their
identities stolen each year. One of the many ways this is done, is through
internet payment services. For this reason many people are scared of
buying online.
20. 19 | Nathan Klotzman
Consumer Market Segmentation…………………………………………………………………………
Vector Marketing Corporation
Ever since 1981 – 1984, making more sales than any other independent
seller, Vector Marketing was bought-out to sell Cutco cutlery to consumers. Now,
Vector Marketing, Cutco Corporation’s exclusive distributor, owns 280 district
offices that work year round, plus 300 branch offices which run during the
summer only. These offices cover most of the 50 United States in 6 regions:
Northeast, Eastern, Midwest, Central Southwest, and Western; using the
territorial sales force structure. Being demographically placed Vector Marketing
hires college students to sell to the high income households, usually over $50,000.
To further their sales cause, Vector Marketing uses the college students to sell to
their families and their family’s friends either because of empathy or feelings of
obligation to the college student or student’s family. Other customers college
students sell to, are either impressed with the in-home demonstration or they
know other people who have had customer satisfaction.
21. 20 | Nathan Klotzman
Cutco Retail Stores
Cutco Stores were started in 2006. They were geographically placed where
customers have bought Cutco cutlery the most, because after the college
students graduate some customers tend to lose touch with the company. The
retail stores were also placed where consumers have high-incomes
demographically and where it won’t inhibit the college students’ sales.
In 2011, Tim McCreadie, the director of Cutco stores, started working with
esiteanalytics.com. Esiteanalytics.com is made up of three companies the main
one being eSite and the two partners being esri and TOMTOM, to bring about
Powerful Trip Data and Analytics, competitive marketing intelligence, for the best
placement of company stores. Tim McCreadie plans to use the website to help
him find the best locations for Cutco’s stores in the future, to make sure both of
Cutco’s direct marketing and retail stores can coexist in the same market.
Moreover, Cutco does not want to have to close the stores in a couple a couple of
years, for not making enough profit. Furthermore the website assist Cutco in
realizing who they are marketing to and it’s segmenting of Cutco’s clientele.
22. 21 | Nathan Klotzman
Alternative Marketing Strategies… ………………………………………………………………………
Recruiting Additional Sales Representatives
Strengths
It is consistent with Cutco’s direct sales business model.
There are significant growth opportunities.
There is an existing infrastructure.
Weaknesses
Sales representatives are only available for 14 weeks in the summer.
There is a high sales representative turnover rate.
The managers are unexperienced.
Opportunities
An investment of $10-15 million is available.
A multitude of possible representatives are available.
Training technology is available for representatives.
Threats
The cutlery sales industry is reclining
The company loses touch with customers for additional sales opportunities.
23. 22 | Nathan Klotzman
Expanding Internet Channels for Follow-up Orders
Strengths
It’s easier to reach abroad customers.
It needs a small investment.
It has a high profit margin.
Weaknesses
There will be a lack of presence.
Opportunities
People are constantly buying off the internet.
It will encourage previous customers to buy more.
Sales will be easier to complete.
Threats
It will demolishing the college program.
It may create greater losses.
Some people don’t trust the internet.
People might look for something cheaper once they are on the web.
Cutco could lose its brand exclusiveness.
24. 23 | Nathan Klotzman
Opening Retail Stores
Strengths
ESite will supply good locations for the stores.
It will be a personalized sales force.
Weaknesses
Cutco has to train the managers and employees.
Cutco could lose its brand exclusiveness.
It has high startup costs.
Opportunities
Additional brand recognition could come about.
Stronger customer-company relationship can be created.
It will have an easier selling point.
Threats
If it is overdone it will cannibalize Cutco’s direct selling model.
Cutco will have to have competition-based pricing.
Vandalism of the store could be a problem.
Responsibility for cutlery injuries can come about.
25. 24 | Nathan Klotzman
There could be a low interest with general public.
Competitor retail stores have more experience.
26. 25 | Nathan Klotzman
Pursuing International Expansion
Strengths
Cutco has had success in exporting to Canada and Korea.
Cutco’s high-quality products are made in the United States.
Weaknesses
Cutco was unsuccessful in the past.
There is a high risk of failure.
Opportunities
Cutco could tap into $114 billion global market.
China likes high-quality American products.
Threats
There will need to be a high outlay of money.
Other countries have unstable economies.
International competitors could interfere with sales.
28. 27 | Nathan Klotzman
Growth Driver Table
The table above shows how much would be gained under the four
alternative marketing strategies. Additionally their profits followed up by the
desired results and what changes need to be met to attain the goal of $2.5 billion
over the next five years.
29. 28 | Nathan Klotzman
Selected Marketing Strategies… ………………………………………………………………………
With the decline stage in the kitchen knife manufacturing industry upon us,
I have come to the conclusion that only one of these growth drivers will succeed
in the marketing implementation. The growth driver that will succeed is recruiting
additional sales representatives, for there are multitudes of possible
representatives to hire from and it is consistent with Cutco’s direct sales business
model, with the added benefit of keeping up Cutco’s brand name. Therefore, to
best recourse for Cutco’s resources is to attract additional sales representatives
and train them with the best technology available.
Another option that would have been available if the industry wasn’t in a
decline stage would be to open more retail stores, even though it would destroy
Cutco’s direct sales model and has high startup costs; all of the other relevant
methods of growth will take Cutco into the red in either situation, with or without
the industry’s decline. However, as a secondary growth driver, opening retail
stores in locations that will have little or no effect on the company’s direct selling
model will be of avail. When a sales representative leaves, the customers that
were gained through their hiring tend to lose touch with the corporation, making
a loss of potential sales for Cutco. This is where retail stores come in, they will be
30. 29 | Nathan Klotzman
placed in areas where Cutco has had a lot of sales with previous customers. In this
way, retail stores will bring up the rear so to speak, in obtaining and retaining
customers.
31. 30 | Nathan Klotzman
Marketing Mix Decisions (4 P’s)
Product
500 (stock-keeping units)
Homemaker Set Plus Eight
5-piece set of flatware
6-serving pieces
Line of accessory kitchen products
Price
From $27-$2,659
Increasing by 5% every odd year (2009, 2011, 2013)
Place (Distribution)
United States and Canada
Vector Marketing directly sells Cutco through six regions of the United
States to households.
UPS and U.S. Postal services are used to deliver products to customers.
www.cutco.com (online selling)
8 Retail stores
33. 32 | Nathan Klotzman
Short & Long-Term Projections… ………………………………………………………………………
For the moment, Cutco should use a marketing mix to attack the market
from two different directions sales representatives and retail stores, with a slight
input of online technology.
As of 2011, Cutco’s subsidiary, Vector marketing, has contracted about
60,000 college student workers each year to perform entry-level sales work and
should still be an ongoing project. Although Vector Marketing hires a lot of
College representatives, there is a high sales representative turnover rate
limitation, due to lack of initiative to instigate sales and lack of drive. All sales
representatives, depending on their level initiative and drive, subsequently earn
different amounts and a median or average cannot really be acheived. A good
representative example is Mike Dawid who sold over $218,000 in 2011, over
$302,000 in 2012, and over $400,000 in 2013. So, assuming a good college
representative makes about $50,000 in a year in commissions, depending on the
commission percentage Cutco will need 2,500 representatives at 5% commission
to 10,000 representatives at 20% commission, of the revenue. Over time, Vector
Marketing will lose and gain representatives some will be good and some will be
bad, the key is finding the good ones.
34. 33 | Nathan Klotzman
Starting in 2006, Cutco has started trying the retail marketing waters, to
test the market for retail sales. At the rate of about one new store a year, Cutco
has opened eight stores with the estimated income per store at $625,000
annually each coming to $5 million in estimated revenue; mostly from previous
customers. With the decline stage in-tow, Cutco should continue adding a store
each year through 2017 and the two years following three each. This will come
out to seventeen stores, fourteen of which will be fully functional and three
partially functional by 2019; meaning $10 million in estimated revenue that year.
Most of the retail stores should have paid for themselves at this point. With using
eSite’s spatial analytics, Cutco’s retail chain won’t upset Cutco’s direct marketing
model.
Online Activity for now is a little quite, slowly building up fan bases while
having online sales availability, with minimum investments in the websites.
Anyone who wants can look up Cutco and its reviews to help them decide on
whether or not to try Cutco. Furthermore, online sales availability makes it so the
customer doesn’t have to go to a faraway store or find a representative plus
customers across seas have the ability to purchase Cutco’s cutlery.
35. 34 | Nathan Klotzman
In the future, Cutco should continue to recruit additional sales
representatives to keep up its brand name and be personal with its customers.
According to Tim McCreadie, there could be prospects of a 150 retail stores, to
retrieve previous customers. For this to be possible, the retail stores have to be
successful and the market for kitchen knife manufacturing industry has to be
rising back up again. Furthermore, for the long-term projections Cutco should
maintain sales in Canada and Korea and slowly grow more into them, while at the
same time Cutco should look for bigger manufacturing plants and advance its
technology to produce its cutlery faster.
36. 35 | Nathan Klotzman
Conclusion… …… …………………………………………………………………
In my opinion, Cutco, should use two active strategic plans and one passive
strategic plan in its marketing mix. The two active ones being retail stores, the sub
strategy, and recruiting additional sales representatives, the main strategy.
With the market going down over the next three years, Cutco should
exploit the recruiting of additional sales representatives because of its low
investment, even though it has high representative turnover rate. While this
could be totally relied on to make Cutco’s goals, it has its potential gains that are
lost, when a representative leaves because the potential ongoing customer loses
touch with the company. Therefore, to retrieve these potential customers, for
future sales, Cutco has to strategically place retail stores using eSite’s spatial
analytics, so as not to interfere with the direct selling model. This way, both the
retail stores and the independent sellers can coexist and complement each other.
The retail stores after a big investment can also yield good result in
estimated profit, but with the decline there is too much of a risk, with a lot of
money. So, the solution of retrieving potential customers has to be accomplished
37. 36 | Nathan Klotzman
slowly and methodically in places where sales are still available to be had and in
places where the household income is over the median household income of
$50,000.
The passive strategy should be Cutco’s presence on the web. It has a
website that shows off its knives, news articles, and allows one to buy Cutco’s
products. Facebook, is Cutco’s way of letting customers talk about their purchase
decisions, learn new recipes, and learn a whole lot more about Cutco. Cutco
moreover should use its presence to refute people who degrade it and its cutlery.
It is to my understanding, the only way for Cutco to reach its goal of $2.5
billion or more annual revenue in the next five years and $5 billion or more
annual revenue in the next ten years, they must recruit and retain good sales
representatives. Retail stores, will only assist the goal a little but not enough to
truly make a difference in its completion.
